March 2013 Editorial: Labour must put forward a clear alternative


The unprecedented triple dip recession is almost upon us. Over four years on from the banking crash, with unemployment across Europe at record levels, the economy continues to flatline and the assorted remedies fail. Now Britain has lost its triple A credit rating, the one event that all the Chancellor’s austerity was supposed to avoid.

Publicly, the Government continues to insist that the size of the budget deficit is the problem and investment and growth won’t pick up until it’s reduced. Hence the increasingly desperate and odious measures to reduce public spending and restore profitability by driving down wage rates. For the Tories, this chimes nicely with an ideological drive to complete Margaret Thatcher’s mission: unionbusting, privatisation, and welfare cuts.

The breakneck pace at which our schools are being forced to become academies and the hugely unpopular hospital closure programmes are stripping away the welfare state. The benefit cap and bedroom tax are causing hardship on a scale not seen since World War Two. People are being forced out of their homes, often relocated to areas where housing is cheaper precisely because there is no work. This dispersal, beginning in London and the southeast but likely to affect the whole country, is nothing less than social cleansing.

Up to a quarter of a million people will use food banks this year — entirely unnecessary, claims the Government. Over one in four children are in poverty. According to police and charities, more and more people are stealing to eat.

Yet there’s plenty of money for the £17 bn war in Afghanistan, the sending of British troops to Mali — backed by Labour’s front bench — and subsidies for the arms trade. Total government support for UK defence industries is over £4bn, while the cost of political backing for the merchants of death is incalculable. Cameron has prioritised selling weapons on his foreign trips more than any predecessor and now suggests that vital aid money be diverted to military missions.

The Government’s public commitment to austerity is unwavering. But behind the scenes, there are frantic attempts to kickstart the economy. Nearly £400 bn has been pumped into the banks in the form of quantitative easing.

The problem is that the banks — which caused the crisis in the first place — are not lending. Higher returns can be got from short term gambling and speculative investments abroad. Some economists are now suggesting bypassing the banks and injecting money into the real economy directly.

But a more obvious solution is to take the banks into public ownership and direct investment where it’s needed on a planned basis. The choice between private profit or public need ought to be at the very heart of political debate right now. Why isn’t it? Perhaps it’s because the Labour leadership is, like the Government, committed to cutting public spending to reduce the debt.

Perhaps it’s because the marketisation that the Government is using to destroy the welfare state began under New Labour — academies, foundation hospitals and workfare all began in the Blair years. And many in Labour’s Shadow Cabinet still support these policies.

When Labour’s front bench opposed benefit cuts in Parliament recently, it united the Party, raised its profile and increased its popularity. People are crying out for an alternative to the waste, unemployment and misery of neoliberal capitalism.

Labour could learn a lesson from Ecuador, where President Rafael Correa was just re-elected for a new term, 34 percentage points ahead of his closest rival. His government has lifted millions out of poverty, largely because it devotes a greater share of its economy to public investment than any other country in Latin America and the Caribbean.

Labour must overcome its timidity. Its lead in the opinion polls is welcome, but it is not as strong and consistent as it could be, given the unpopularity of the ConDems’ measures. Once the media turn its fire on the Party, this lead could quickly melt away — unless our leaders start to articulate a clear alternative and, above all, support those in the workplace and the community who are resisting the
Government’s onslaught.

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